The Court of Appeal has upheld a ruling that Uber drivers are workers, in the latest round of a landmark gig economy legal battle.
Three justices agreed with two lower tribunals that Uber was wrong to classify its drivers as independent contractors.
Under the ruling drivers will be entitled to basic rights such as holiday pay and the minimum wage.
The ride-hailing firm had argued that it merely acts as an agent, linking drivers with customers via its app. But in a case brought by two drivers, the Court of Appeal on Wednesday rejected Uber's argument and upheld the Employment Appeals Tribunal’s earlier decision.
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Rachel Farr, an employment lawyer at taylor Wessing said: “This decision will have an impact both across the gig economy and in more traditional sectors and will give encouragement to claimants in other cases which are awaiting a hearing or stayed pending the outcome.
“Uber has up to 50,000 drivers in the UK and the costs that go with worker status (such as holiday pay and the national minimum wage) will have a huge impact on the viability of its business model and pricing.
Uber's competitors and businesses in the gig economy will also be considering what this means for them, while the decision will have given hope to those who believe they are workers who deserve a better deal.
“But just because Uber lost, it doesn't mean that others will: each case will be considered on its specific facts, including the contractual terms between the parties and what actually happens in practice. In any case, it's probably not the end of the road: given the importance of the case to Uber, I expect that they will seek permission to appeal to the Supreme Court.
”This judgment has come out in the same week as the government published its Good Work Plan, in which it has promised to review and clarify the tests around employment status as recommended by the Taylor Review in 2017.